The video is about understanding the correct way to DCA. Bear markets are not good to DCA when one wishes the price to go up. We video shows an accumulation and distribution model which helps ident...
Transcript
What is the right way to do DCA, given that we are in the bear market and the price has been dropping since weeks? And what we see on social media is every time there is a drop, people say, buy the dip. Now, the question to address is, is this a right strategy? that whenever Bitcoin crashes by 15%, 20%, then do we follow the strategy of buying the dip? So, welcome to the RR ratio channel. Here, we want to approach buying, selling of an asset by viewing them, analyzing them from a technical point of view. Of course, it's not a financial advice. Everyone can decide on their own when to buy and when to sell. Nobody is responsible for that. But to have some understanding of viewing the chart from a technical point of doing technical analysis definitely gives an edge on how we can perform better than ourselves in some sense. Okay, so since October, Bitcoin has been going down, and with each crash, people on social media are saying, it's just a temporary crash by the dip. So the first time I heard the term by the tip in this bear market was in October. and 4,998. It rallied for a few weeks. And at that time, the narrative was, see, I told you, by the tip, Bitcoin is going to go back to its bull market and reach to $500,000 and so on. Well, that did not happen. So, next time when I heard by the tip was over here. When it was at 90,000, the narrative was, it's just a flash crash, Bitcoin will recover again. It did not. Because by the tip, running around on every post was floating around on every post when it was at 80,619. This was also a flash crash. And people went crazy that... when Bitcoin rallied back up to 97,000, you can see it on social media that everyone is saying, you see, I told you buy the dip, and now you are crying about not buying the dip. But what happened in the next two weeks is it broke that level again, and it continued to go down. And it went all the way to 59, or 60,500. the same story again, buy the tip, we see a rally, people saying that, see, I told you to buy the tip and it's still, they have not learned their lesson, let's say it like that. Bitcoin rallies by around 20, by around 36%, which is a good rally. If someone would have bought here and sold it, that's a good trade. But the idea of buy the dip is not trading. The idea for them is this is the bottom and Bitcoin will start its bull market from here. So the buy the dip narrative here is broken again and we see Bitcoin by the dip mafia is now telling buy it again at 60,132 when it was just, I think two days ago we saw another crash. and we start seeing buy the dip floating around on social media. Now the problem of buying the dip is we have 1, 2, 3, 4, 5 by the dip situations. Let's add them up. So the first one, let's say we buy one Bitcoin, right? So the first one here is 104. 998. Then the second one is 98933. Then it is 80619. Then the next two dips were 60580, and the last one is 60132. Okay, so we have 104, 998, 933, 8061965, okay, it's, I think I took the different number, but it's very close, and that was the actual price. So I think this is like this one, 60132, and we have... 580501 I think I took the current price for them so we got we bought one two three four five bitcoins when it's by the dip right we get this one and its average value is then you divide this number this value by five and we get 80,546. So where is 80,000 right now? 80,5006, so somewhere here, right? That is my average price because I was following by the tip strategy. I am right now approximately 25% down my portfolio of buy the dip strategy is 25% down so one might one might ask when when should one buy when should one take entry given that they would like the price to go higher if you are shorting then all of this is perfectly fine but the buy-the-dip narrative is not for shorting, it's for buying, holding, and then selling it at a higher price. This one, let's market this red here. Oh, that's not too red. Okay. Now, to understand when to buy the dip or when to DCA dollar cost average, we first need to figure out what is the trend. This is clearly in downtrendent, but when does the downtrend end? For that, we have our model of accumulation lines and distribution line. The idea here is that whenever Bitcoin price crosses the distribution line, that is the red line, it is in the bare market. It continues to stay in the bare market until it crosses the green line. And after the green line, we do see a drop and some sideways action. And after sideways action, that's when Bitcoin starts its new bull market. We see this every single time in all the mature cycles, happened in 2014, 2015, 2018, 2019, then 2022, 2023, and it's quite likely to happen in 2026 and 2027. The price will go sideways. After it has cross the combination line, we might see a drop, it might see a sideways action, and then it will start its next bull market. If we want to long Bitcoin, then the best strategy is to buy to DCA during the bull market. I would rather see, okay, this price has dropped, so price crossed accumulation line, and then it dropped. It doesn't matter by how much percentage. My first buy would be somewhere here. Now, the next one, whenever I see a pullback, I would buy it. So I see a rally, and then there was a pullback. So let's say I buy it on the first pullback, which would be here. It is this one. Then I see another rally, I see a pullback, it's going downtrend, but I don't know when the pullback ends. So perhaps a better way is like, okay, once the pullback is done, when it goes up, perhaps that would be a better strategy. Pullback has ended, I buy it here. Now there is a sideways action, there was a crash, perhaps I feel like buying it over there. So I have... four entries and now I have this one rally, there's a flash crash and I bite here. That's it. I'm taking four entries and now calculate what happens for this one. We can hide all the red ones. All right, so this one, all clear. Our first entry was at 15,563. Then it was at 25,440, then 3141, 441, then 3852524, and then 56522. our average comes down to 33,498. So that's almost 33500. All right. At the last buy, at my last buy, my average is 3500. So I am already in 65% profit. Now, based on this model, it also tells us that Bitcoin has still a long way to go. So one can enter at all the flash crashes which happen here, or just hold onto it until we see that the price is getting very close to the distribution phase. Let's say I would hold onto my entries and exit at this point because I want to... taking some profits. I leave out all the rally which happens after this point. I'm in 254% profit. So the right way to DCA is when you are in the trend. Quite often people would create some risk levels they would mark based on Fiponacci. they will create something like this where they say if the price goes below this level, that's time to DCA or the price goes below this level, it's time to DCA. It's all right to do it only when you are in the trend. It makes no sense to do DCA when it's a bare market and you wish to have Bitcoin price go up. I think that would be all for today's video. If you like the content, then do hit the subscribe button and support the channel, the RR ratio. I'll see you in the next one. Bye-bye.